Schaumburg seeks taxing district for STAR line redevelopment

Schaumburg is considering a funding mechanism that would use taxes from the local school, park and library districts to pay for public improvements around its future STAR line rail station.

Village trustees Tuesday hired Busse Consulting Inc. of Glen Ellyn for $49,500 to study whether a tax increment finance district would be appropriate in the area near the future station.

A TIF district freezes general property taxes at the level of the first year. From that point on, any amount collected above that level goes directly to public improvements in the district, rather than to the taxing body that normally would receive it.

A TIF district expires after 23 years or when all public improvements have been paid off, whichever is first.

Normally, the municipality collecting the TIF district money is just as affected by this property tax freeze as the schools, libraries and park districts. But Schaumburg collects no village property tax.

Instead, Schaumburg would pay the TIF district fund 10 percent of the annual amount collected from all the other affected taxing bodies combined, Village Manager Ken Fritz said.

The STAR line, though still estimated to be 10 years off, would connect O'Hare International Airport with suburbs west and south, all the way to Joliet.

Schaumburg's proposed station would be in the center of the Northwest Tollway, between IKEA and the new convention center.

The proposed area of the TIF district is north of the tollway, south of Algonquin Road, east of Meacham Road and west of Rolling Meadows.

Schaumburg officials hope the area will redevelop with businesses and condominiums to serve commuters and convention center visitors.

The rationale for TIF districts is that property values -- and taxes -- will be higher after redevelopment occurs.

While TIF districts are often associated with restoring a blighted area, they may also be used to redevelop areas whose uses are outdated due to changes in the marketplace, Schaumburg's economic development director Matt Frank said.

Busse Consulting's report is expected within six months. If it finds justification for a TIF district, its implementation would probably be sought sooner rather than later, Frank said.

A TIF district created to develop Town Square at Schaumburg and Roselle roads will expire in 2013.